Time Flies Like an Arrow; Fruit Flies Like a Banana (Anthony G. Oettinger) – The Importance of Time in Planning Your Successful Financial Future

I’m Planning to Retire/Semi-Retire Now!

People today are living longer and spending more of their life in retirement so it’s important to get it right. As a financial planner, a common situation I’ve found is people coming in for a first meeting and saying ….”I’m planning to retire next month so I thought it might be a good idea to come and see someone about planning my retirement…” which is great! We discuss what they’re planning to do in retirement which is an exciting and positive experience as they start to visualise the life they’ve been dreaming of being not far away.

When we then start talking about where they are now financially sometimes the conversation can take a rough turn.

Why Does the Conversation Take a Rough Turn?

The reason is that when matching someone’s future plans, e.g. travel abroad, buy a holiday home, new car etc, and their financial position we can often hit a problem. The life they’ve been planning to have in retirement doesn’t match with their finances! i.e. they can’t live this lifestyle and make their money last through their retirement.

When this arises while there are a number of financial planning levers that can be pulled to improve their situation, quite often these levers need time to work. However, those on the verge of retiring/semi-retiring don’t have time to just immediately turn their retirement ship around to avoid the retirement ice berg! – i.e. they don’t have the time to get their retirement plan back on track.

“You May Delay, But Time Will Not.” (Benjamin Franklin)
While you may delay thinking about your future plans and retirement, time will not. People often ask “when should I start planning for retirement” and you’ll probably have often heard the comment” Now!”. This is because even though retirement may seem a long way off, the little things that you can do now will add up over time. Thinking now about what you want your future to look like gives you a starting point to understand what you need to start doing to make that a reality. This doesn’t only apply to planning for your retirement or your ongoing planning after you retire but also planning for any kind of goals you may have.

The Two Most Powerful Warriors are Patience & Time (Leo Tolstoy)

The Importance of Time & How it Can give You More Control Over Your Future

As Warren Buffett the legendary investor says “Someone is sitting in the shade today because someone planted a tree a long time ago.” Like growing a tree, it takes time to plan and organise your wealth for retirement. You can start planning by:

Setting financial goals for the future;

Mapping out a path to achieving them; and

Putting a Financial Plan into action to significantly increase the likelihood of success in achieving them.

By tracking your progress along the way you can know whether you are on target or whether you need to make changes if it appears that you’re going to fall short. This gives you greater flexibility and control in achieving your plans allowing you to feel positive about the future.

Being patient when travelling on the journey to achieving your goals is also important. Avoid the temptation of “get rich quick schemes” or “quick solutions to your problems”. While these may sound great they’re usually too good to be true. Sometimes people are lured into these arrangements because they’re worried they won’t be able to financially support themselves for as long as they need too or that taking that path may catapult them ahead financially. With clear goals and a plan to achieve them in place, patience and time can be your strong allies.

What Can You Do To Improve Your Situation?

If someone is not on track for retirement then they may consider options such as:

Delaying their retirement

Saving more by making a budget, reducing their lifestyle spending and investing the excess wisely

Making additional contributions to super to take advantage of the tax concessions and grow their retirement nest egg

Reviewing their superannuation and other investments to make sure they are invested to suit their needs

Minimising the amount of tax they pay

What If You Are Already Retired?

If someone is already retired but worried that their money won’t last then they may consider options such as:

Saving/saving more by reducing their lifestyle spending via making a budget and sticking to it and drawing less from their super

Consider downsizing their home to free up some additional capital to fund their lifestyle

Reviewing their superannuation and other investments to make sure they are invested to suit their needs

The key is thinking in advance about what you want your future life to be and then having a financial plan in place to achieve it so that you remain in control.

The following quote from Dr Seuss is a good one to finish on:

“How did it get so late so soon? It’s night before it’s afternoon. December is here before it’s June. My goodness how the time has flewn. How did it get so late so soon?”

Note: Any advice contained in this document is general in nature and does not consider your particular situation. Please do not act on this advice until its appropriateness has been determined by a qualified financial adviser. Whilst the tax implications have been considered we are not, nor do we purport to be a registered tax agent. We strongly recommend you seek detailed tax advice from an appropriately qualified tax agent before proceeding.

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